Closing time
Another step toward sanity and happiness was taken today as we closed on the sale of the condo. I am now free of debt, free of a crazy neighbor, free of thinking about repairs and termites and crabgrass. Right now I feel totally miserable about the whole thing. I think about all the money that was made off of my unhappy circumstance by the real estate brokers and the lawyers, the town, as they charged me to have my smoke detectors inspected, and the state, who made sales tax on the transaction. The idea of home ownership is, in my opinion, far shinier and more attractive than the reality. From big things, like having a neighbor move in who is totally insane and incapable of conducting her own affairs, to little things, like hearing a drip of water and wondering what you need to fix. Economic downturn and five-figure losses, and having to recaulk the bathtub. It all kind of sucks, really.
I don't even have to stay in the sphere of the personal or emotional when it comes to this topic. In a March 2009 Atlantic article, Richard Florida touched on the mythical nature of home ownership as a desirable goal. Here’s a lengthy, but relevant, quote:
In other words, owning a home, despite the encouragement of REALTORS(tm), your parents, the federal government, and just about anybody who is not actually on the hook for your housing problems, is not a one-way ticket to happiness and prosperity. If I had been renting this place, it would have been a hell of a lot easier and cheaper for me to leave when the situation got so unpleasant so fast. And I have a feeling that part of the neighbor’s stubborn refusal to compromise with us, or even understand her own situation, stems from the fact that she’s just as tied to her place by a mortgage as we are. Once it became clear that cooperative living was impossible, one of us had to take a huge hit to extricate ourselves from the situation. And that, my friends, sucks. That minor tax deduction for mortgage interest does not soften the blow, believe me.
Anyway, once we move this weekend, this whole debacle will start receding into the rear-view mirror. Then I can get back to posting Halo 3 screenshots and talking about tennis and cycling. I do want to thank you loyal peeps who have given me much sympathy through this whole thing. It is much appreciated.
The housing bubble was the ultimate expression, and perhaps the last gasp, of an economic system some 80 years in the making, and now well past its “sell-by” date. The bubble encouraged massive, unsustainable growth in places where land was cheap and the real-estate economy dominant. It encouraged low-density sprawl, which is ill-fitted to a creative, postindustrial economy. And not least, it created a workforce too often stuck in place, anchored by houses that cannot be profitably sold, at a time when flexibility and mobility are of great importance.
So how do we move past the bubble, the crash, and an aging, obsolescent model of economic life? What’s the right spatial fix for the economy today, and how do we achieve it?
The solution begins with the removal of homeownership from its long-privileged place at the center of the U.S. economy. Substantial incentives for homeownership (from tax breaks to artificially low mortgage-interest rates) distort demand, encouraging people to buy bigger houses than they otherwise would. That means less spending on medical technology, or software, or alternative energy—the sectors and products that could drive U.S. growth and exports in the coming years. Artificial demand for bigger houses also skews residential patterns, leading to excessive low-density suburban growth. The measures that prop up this demand should be eliminated.
If anything, our government policies should encourage renting, not buying. Homeownership occupies a central place in the American Dream primarily because decades of policy have put it there. A recent study by Grace Wong, an economist at the Wharton School of Business, shows that, controlling for income and demographics, homeowners are no happier than renters, nor do they report lower levels of stress or higher levels of self-esteem.
And while homeownership has some social benefits—a higher level of civic engagement is one—it is costly to the economy. The economist Andrew Oswald has demonstrated that in both the United States and Europe, those places with higher homeownership rates also suffer from higher unemployment. Homeownership, Oswald found, is a more important predictor of unemployment than rates of unionization or the generosity of welfare benefits. Too often, it ties people to declining or blighted locations, and forces them into work—if they can find it—that is a poor match for their interests and abilities.
In other words, owning a home, despite the encouragement of REALTORS(tm), your parents, the federal government, and just about anybody who is not actually on the hook for your housing problems, is not a one-way ticket to happiness and prosperity. If I had been renting this place, it would have been a hell of a lot easier and cheaper for me to leave when the situation got so unpleasant so fast. And I have a feeling that part of the neighbor’s stubborn refusal to compromise with us, or even understand her own situation, stems from the fact that she’s just as tied to her place by a mortgage as we are. Once it became clear that cooperative living was impossible, one of us had to take a huge hit to extricate ourselves from the situation. And that, my friends, sucks. That minor tax deduction for mortgage interest does not soften the blow, believe me.
Anyway, once we move this weekend, this whole debacle will start receding into the rear-view mirror. Then I can get back to posting Halo 3 screenshots and talking about tennis and cycling. I do want to thank you loyal peeps who have given me much sympathy through this whole thing. It is much appreciated.
